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Thane Gustafson Education. (2013) 'Wheel of Fortune The Battle for Oil and Power In Russia.' New.

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Russia 26, United States 6, Us 5, Texas 4, Washington 3, Siberia 3, Moscow 3, U.s. 3, Hopkins 2, Peters Berg 2, New Mexico 2, Bp 2, Douglas 1, Steven Douglas 1, Marco Rubio 1, Sobers 1, The Bp 1, Frack 1, Horizontal Frack 1, Keith Bush 1,
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  CSPAN    Book TV    Thane Gustafson  Education.  (2013) 'Wheel of  
   Fortune The Battle for Oil and Power In Russia.' New.  

    January 12, 2013
    9:00 - 10:00pm EST  

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was in his officer. they remained friends. he said to the president, why do you keep that man so close to you? that man being hopkins. he did not like hopkins. and roosevelt said, you know, you may be in this office someday you'll understand. but he asks for nothing except to serve me. >> trusted adviser, friend and confident to fdr. harry hopkins lived in the roosevelt white house for three and a half years.
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"cop -- hopkins touch "on c-span2. next from politics and prose bookstore in washington, d.c. thane gustafson looks how russia's unstability systems could impact the oil supply. he explores what it mean for the global economy. it's a little under an hour. >> it's a pleasure to see you here tonight. as we know, happiness is relative thing. i began the day this morning in the dentist's chair having a crown put in, and here by tonight i'm at politics and prose. i'm a happy man. having gone from one extreme to another. it's a special pleasure to welcome you here tonight. and standing room only.
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this is marvelous. i thought i would begin by telling you a few stories about what the book is about, and skipping the big structure and simply tell you some stories about some of the people in the book. in the end it's very much about real people. so what kind of book is this? it's big, it's heavy, it's, you know, you may open it with a certain trip dedication. what it is is a memoir, first of all. it's a little bit of a memoir of my travels in russia. it's a memoir of the number of the people in the weak. we have gone through twenty years together. it's a memoir of the last twenty years since the soviet union fell apart. it's a history of the oil industry and but in par par
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parallel to history the initial collapse of the 1990s and gradual recovery. the decade after so we end up with at russia we see today after this long cycle with the russian oil industry has gone through the same cycling. it's a biography, it's a multiple biography of a number of people but in particular of the clan that emerged in the 1990s from the city of saint saint peters berg and came with putin in the year 2000. you can sum up the last twenty years by saying it's the revenge of saint peters berg over moscow as they take over and are very largely without much exaggeration are in command. this is very much a saint peter berg crowd. it it's a history of the emergence of the crowd. it's the latest chapter in the
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300-year rivalry between the two capitals. it's the tale of two cities. it's a murder mystery that i can't give you the names of the guilty ones in every case. you can draw your own conclusions. there are some marvelous unsolved mysteries that may be unralphed someday. it used to be said in russia in 1990 you could fell the business was profitable from the trail of bodies that lead to the front door. if there were no bodies it wasn't worth paying attention to. it wasn't profitable. i'll leave it to your imagination where the international red cross was highly profitable by that measure in the 1990s in russia. the subsidies you could get for the import of tax free tobacco and alcohol to benefit good causes such as the red cross.
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even the science fiction story. what we're dealing here really when you come down it the oil industry in familiar grew up in almost completely isolation and this is virtually a unique case. we have other places where oil industry have gone grown up and run by national oil companies. almost in every case, in fact in every case, the industries were first founded by foreigners and then were taken over. not so in the case of russia where from the 19 20s rate on the oil industry was home grown and developed the own culture and civilization even as the soviet union did with the own
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language and culture. i sometimes like to tell my classes that the story of russia in the 20th century is very much that have a people who decided that capitalism didn't work. so it's though they are piled in to a space capsule and took off and landed on the planet mars and started a different civilization which the market was thrown out in prices and private ownership and built that civilization and made it run for nearly six or seven decades, not well, but it ran. then they decided it wasn't working with particularly well. they piled back to the space capsule and came back to earth. which is remarkable. it's something russians do every so often. they conduct the massive social science experiments on themselves. this isn't the first time they have done it. here they are back on earth again and the oil industry
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suddenly faced the world. how they came to terms with one another. the past twenty years have been a time of revolution in the global oil industry. and suddenly you land on earth and you suddenly find yourself at least in the oil industry, faced with a race -- that's a story. the book has tragic heroes and tragic antiheroes. one of whom in jail. the man who was briefly the richest man in russia who ran the most successful private oil
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company in russia at the time of his arrest in 2003 and the man has been in jail now for nearly ten years, and october 2013, he will have been in jail for 2014 -- in jail for ten years and this very much is the result of a blood match with his nemesis, valid my putin. one of the big questions is when will he get out? no one knows. but the other question is what exactly did he do? and there has been a great deal of coverage of him. and i didn't want to add to that whole literature, but what i have tried to do is to go in to his company and i've had interviews with a number of players in that company to try to find out what was unique about that company that he built. what was unique about it that enabled it to double oil
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production within four short years? how is that done? you'll find the chapter on that side of the story. then lastly, i have to say that this is a story of guilty love. which i'll come back to if you ask me. what's the book really about? all right. let me give you the main points here. i'll keep it brief because the basic structure the skelton of the book is quickly told. it's a analysis. it cull man nates in a prediction. this industry, which is now at this moment, the world's largest oil producer because the saudis have tholgds back. they play tag with one another. they alternate and -- for who is the world's largest oil producer. russias at the moment are a hit. they moved up very slightly to
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very nearly the soviet level of production. meanwhile the saudis have battles back in order to moderate the -- as a matter of fact why are they like that? we request come back to that. so anyway, there we have the russians who are the number one oil producers. but they have essentially been coasting on the asset inherited from the soviet union from another time and another place. and such was the wealthy of what was discovered such was the wealth of what is still producing 60% of russian oil production today comes from fields that were already in production at the time of the collapse in the soviet union. virtually all of russian oil today comes from fields already known. or have been very new discovery ies that are producing today.
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the drama of the situation is that the inheritance is starting to run down. and the place to look is west siberia, which has been the producing core of the soviet oil industry since the 1960s, has been the locomotive of the industry for the half of century. it's now in decline. that doesn't mean that the russians are running out of oil. there are phenomena reserves, and of course, i'm not talking about natural gas which is a different story. the future of russia will be natural gas not oil. let's stick with oil for the moment. there's plenty of oil left, but as you move out of that inherited comfort zone, you move to areas that are deeper, that are colder, that are sourer, that are more complex, that are more distant, that are offshore,
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in a word, you move to oil that is more costly, if only because now you have to invest in it instead of just inheriting it. and the result of that is that it's going to be less profitable. now the reason that matters is that the oil industry has a very important customer. that's the russian state. and the russian state for the past two decades and going back to soviet times but particularly in the last twenty years, russian state has become extremely dependent on the revenues from oil, and indeed the -- [inaudible] the pure from the soviet legacy the past twenty years. to a greater extent that in the soviet state ever dependented on oil. and that dependence is growing. and you can show that on the graphs, you can show that on the
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slides that i occasionally use in presentations. you can show that percentage of the russian budget that comes from oil and gas revenues. it's going up and up, and round numbers in 2012 it passed the 52% mark. that's oil and gas revenues together. it's very largely oil. and to put that in perspective, you have to add that the russian budget itself is growing very rapidly. to support the -- some of the same obligations we find others -- a pension system and the like. in addition to that the budget has to support the growing ambitions of the putin leadership to increase funding for defense, funding for infrastructure, for the renewable of industry, and indeed shall we say for the support of many clans that
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provide the basis of support for the regime. this sets the stage. these two trends the increasing dependency of the russian state on oil and gas revenue to feed an expanding budget and the impending increase in cost of declining profit from oil and gas, this sets up a visualize it in your minds two contrary curves that are going to intersect somewhere. and result in crisis. the russian oil industry in the next generation is simply not going to be able to support the growing level of expenditure that is basic to the russian system to the russian state system that we see today. and that's the core argument of it.
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the russian state can't help itself. it is effectively addicted. but the russian oil industry can't help its because it has in effect had twenty years without having had to compete to innovate. it is not ready at this moment to compete in the same way that the world oil industry is now competing for new sources of oil for new technology, and indeed it's causing a new revolution in oil around the world. the russian oil industry is not yet ready to do this. it will be, the question is how fast. it will be, the question is what incentive will the russians state provide? what point will this intersection take place? so i'll stop there. that is the core of the book, and why don't we open the floor for questions and answers and
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take the discussion whenever it goes. good. there's another microphone. good. >> i'm sitting near the microphone so i'll grab my chance here while i can first in line. your last the last idea that you just presented is the central idea that the regime now faces the problem of coming up with the technology and the where with all to expand to sort of invest in the industry and develop the industry more than they have in the recent past. is the -- do they have a, you
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know, i think of russia as being fairly technology logically competent. do you see any great dependence they're likely to have for any number of years in developing their own technological exaipabilities -- capability through the educational foundation of it or just any other aspect of oil and gas technology so forth that they can't produce come up with their on own reasonably inexpensively or at least in comparison to what they have to sort of come up with if they have to deal with the rest of the world? and in particular, of course, whether they'll be forced to look to the u.s. or to the sort of traditional western opposition for that? >> well, thank you are in thank you for that question. that is indeed the central
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question. that is the question that needs to be raised next. let me say, first of all, to put things in perspective, when i say that the russian oil industry is not ready and i'm going take a few minutes to answer this question, so i hope i won't keep you standing too long. we're talking about extremely clever people. we're talking about people who are not -- [inaudible] so the right way to think of it is moving fronts. the world oil industry has been moving so fast that what we're talking about is a russian industry that although it has been moving forward, has not been moving forward at the same rate at the same pace. so there is that gap an indeed perhaps a widening gap. now in some instances that gap is quickly overcome. let me give you an example, the same as fracking that we're
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hearing so much about. the russians, first of all, will tell you they inconveniented fracking. over. i looked in to this quite a bit, it turns out that it's not quite true. the first fracks were done in the united states in the gas industry, i believe in missouri in 1947. if i remember correctly. and fracking, by the way, is used in the gas industry on a massive scale ever since. so suddenly we become aware of fracking. it's been going on before our eyes but many notice all along. the people who brought it back, hour, were the canadian who brought it to russia in 1988, then big time after the soviet union fell apart. and fracking started to be applied on a massive scale in starting in about 1998. now the point of the story is
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this, even though it was new to the russians, practicedically speaking in stwaight. it become a russian big -- they were doing fracking on a larger scale. it gives you one measure of the lag and the lag quickly overcome. at the opposite extreme, however, there are techniques that are completely out in russians and that require a whole different aura of capability because they are more difficult. and the prime example of arctic offshore. now there are two examples in the world of countries that have gone from zero to sixty in developing world leading capability for arctic offshore. norway and now brazil. those two are really the touch
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donees. they are the benchmarks. and those two examples tell you it takes about twenty years. if you do it right, and you develop your own home grand canyon grown industries for arctic offshore and you start doing it and take it and make your mistakes and start logging your achievement. it takes you twenty years from zero to the forefront. where the russians are at this moment are effectively zero. they didn't have to. they had no need go off to the arctic offshore. and so the starting gun is now. and it will be very interesting to see whether they do as well as the nor wee nor wee again and the brazilians from scratch a home grown city that can perform at the top of the world standard. you can about they have enlisted the western company as the nor
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wee -- we are seeing the beginning of the fascinating chapter too in which the question of the hour and the question of the decade, question of the next two candidates is going to be how well can the russians work in partnership and learn what they need learn from the likes of exxonmobil, et. cetera. and so that's what is at stake right now. >> hi, thane. >> thanks. >> you said that . >> how nice to see you. >> nice to see you. you said in part this book is about guilty love. we ask you to tell us about that. so i'd like you to tell us about that. [laughter] >> true confession, the guilty love is mine. and although it is unfashionable
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too confess love for the oil industry, i must say that in the process of researching and writing and living this book, i have become captivated by the extraordinary ambition of a wager that the oil industry makes every day, which is the incredible bet against nature that consistencies of walking up to what to all the appearances looks like an empty baron piece of real estate and figuring out that anywhere between 1,000 and 5,000-feet down, there's rock. by the way, i don't know if you have ever actually seen the rocks that oil comes from. it's amazing. you -- you would walk by on the street and never look twice. gray rock.
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it's very dense. it looks about as hard and dry as anything as you can imagine. and yet inside the microscopic pore -- i'm not talking about shale now. i'm talking about regular sand stone. the shale is even tougher and tighter. inside there unbelievable belie there are these microscopic pores that happen to be filled with oil. and so there you are making this bed bet against nature spending, you know, you can spend the sky is the limit on what you have to spend to drill a well particularly if you're drilling arctic offshore. you're going wager this? over half of the oil production from the united states in the lower half from the over 48 in the united states comes from mom and pop companies, wildcatters, that effectively taking that bet every day. i must say the more i got in to
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this, the more i find, good lord, it's amazing. but i left the best part out. here is where guilty love turns in to passion. i'm going to talk about -- [inaudible] because tight oil is the latest adventure in this amazing story. it begins, of course, back in the 1920. this is what we remember from say daniel's book "the prize" which is this marvelous history of the oil industry. we remember in 1920s your classic wildcatter who then would drill wells and with no science and knowledge. fast forward a hundred years. where are we now?
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i have actually witnessed this myself sitting on a platform in the north sea watching as a guy ocean or drilling engineer sits in front of a computer screen and watching a picture. a picture in full and living color which is being updated every few minutes that shows the structure that a drill bit is going through which the engineer is guiding as he goes. the drill bit is 5,000 feet down and ten miles away. and moving through going through a oil bearing rock in three or four meters -- being sent back in real time from the drill bit as it moves forward, that column
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straight through the -- [inaudible] five or ten miles out and is getting astounding production. not only that, but even so often along the path of the horizontal well he's doing the frack job. you have multistage fracks along the horizontal frack. frack, frack. the result of all of that has been the most extraordinary surprise in the history of the oil industry and possibly in the economic history of the united states in this century. from being dependent on imported oil, we are now on the verge by 2020 of producing some 5 million barrels a day. 5 million barrels a day. that's half of saudi
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production. that oil did not exist except in those stones as recently as five years ago. that is amazing. is this not a love story? [laughter] of course, where it gets extremely interested that the russians are watching. the russians are watching because there's no reason in principle why the same magic cannot be applied in russia at least as far as the stones are concerned. the stones may be even more favorable in west siberia than the lower 48 in the united states. there could be around the corner a renaissance of west siberia. mother nature could save putin yet.
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>> question. did the russians have any revenue exports of significance apart from oil and gas? is this it? >> the magic numbers numbers are 52 and 12. 53 is the percentage of russian export that comes from oil. 12% of the russian export come from gas, which is worth keeping in perspective because we may be heading far first class -- [inaudible] between the europeans and russian over gas export. it's important to remember that the russians are far more dependent on oil than gas. >> what selling price does the russian government get? >> it gets across the board about 60%. >> 60% of the gross revenues. if you look at the percentage of the profit at the margin, that is taken by the russian government, it's above 95
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percent. in other words, the oil companies get to keep very little. >> like a 95% -- [inaudible] >> that's right. one of the highest in the world. >> that's one of the reason the industry is screwed up. >> absolutely. >> what is there any temptation to the russians to sell the problem here by simply sitting there and helping out oil prices go up to $200 a barrel, which might put them -- [inaudible] >> they can't do it. they can't do it. the russians -- well, that's the short end. i'm a professor, after all. they can't do it because the way the world oil market work is the russians are what they call price takers. it's a huge bathtub and whatever you dump in at one end of the bathtub goes in to common bathtub. the russians have to produce
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more than they do today, which is about 12%. they would to have tuneable capacity. what gives the saudis market power is they have -- they reserve capacity to tune up or tune done. they do influence oil prices. but the russians are not in a position to do that. in indeed they have never seriously tried. they have talked various times in solidarity with producers, they sent sobers to opec meetings. but they never joined and show know signs of joining. the oil industry has been an industry that is very much involved in political oversight, let's put it that way. it seems to me that russia is probably more so than any many other countries. [inaudible]
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it seems to me is the political system and -- [inaudible] the technology available they could rapidly accelerate the production. that seems something that is a productive -- [inaudible] in answers that question as to why they don't get it rolling. what was a case study with the bp that seemed to be here is the situation where they cut off the nose to displace the face. i would be interested in your insight what the vp story was. thank you. >> good questions. let's see which one shall i take first? well, on the matter of politics,
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it's very easy to point fipger at the state. there's no question about it. you'll see several chapters in the book that flesh out that proposition. there's no question but there is a serious problem in the relationship between the oil industry and the state. the main problem being, of course, the high level of taxation. but it really is i guess the larger point i try to make in the book. we talk about the effects of the soviet inheritance. in the broadest sense of the word. including a certain culture inheritance. there is a predispositions to control. that's the state's fixization that u you might say is a classic russian inheritance. there's a predispositions to resist the kind of market psychology that we take for granted in the united. let me give you an example of
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that. our view is that money today is worth more than money tomorrow. right. of course. interest rate is all about it. except maybe in washington. i don't know. but elsewhere. if money today is worth more than money today, oil today is worth more than oil tomorrow. therefore, the right and virtuous thing to do if you are a rationale market-oriented person is to produce the oil as fast as possible. even if it means at the ends of the day you get less total production from that field. it is the right and even virtuous thing to do. to maximize the net present value of the oil. that's the market approach. that is profoundly offensive to the classic russian oil man.
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who tends to think in terms of the total tbee logical potential the field and who have the view to develop the field and go on a scientific -- you get that -- [inaudible] the last day you get the last drop. i've had conversations with very senior russian oilmen which they have -- their hands are shaking with indignation as they view the practice of western oil. they call it -- [inaudible] and they have heard more than once russian oilmen say you have to respect the oil. of course, that's something that -- [inaudible] you see what i mean about profound differences in culture, which frequently then take
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political expression. now as for bp. bp is very much at the center of the story in some respects. the bp story is thanks to bp and john browne, the long time ceo of bp that i actually got in to this with at the begin of the 1990s. i was with john brown flying in to russia as he sent the first teams of bp people to look over the lobility we went to places like west siberia a new -- [inaudible] there were many adventures. he was the embodiment of the
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entrepreneur and true. and his vision was that russia was the place to be but it happened in a way that he never imagined. it happened because combination of flukes and circumstances, he was able to gain for bp access to one of the prime developed areas one of what they call in the oil business brown field areas of russian. in particular the one field that had been the prime field in the soviet days, he was able to get an opportunity to gain control of that field and that area. and apply western technology in conjunction with his partners. and the result was $19 billion in profit. that was a unique opportunity. it was a fluke. it was a one-time breakthrough,
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and in a sense, irrelevant to the larger story and will never happen again. it was an extraordinary stroke of luck. if there's one lesson to be had. you have to be there and when daylight opens in the line you have to be ready. in that sense they were ready to go through and they did in the score. but it was a one-time opportunity. sir? >> i know this is a huge subject, but could you give us some sort of overview about [inaudible] so put it in an american context so that we can understand it. as i read about it, i couldn't figure out what was -- who had the power play. what is the court's problem. what was stealing? and why did all of a sudden he start opening gas stations all over new jersey? [laughter]
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>> you bring to mind that for years i've been filling any tank at the local gas station in -- [inaudible] which happens to be one of his stations. it was one of the gettysburg was taken over, and so i filled my tank and i say to the manager, what is this i hear about your -- [inaudible] [laughter] he's shocked but he knows me by now. well one of the oil story which is a different story. because the oil company is private company that emerged out of the ruin. run by an entrepreneur -- [inaudible] who was in fact not russian but -- [inaudible] he started his career when he was a young man, he was working
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on a platform, there was an explosion and he got blown in to the sea at in his early 20s. he struck out for west sigh bore ya, and decided to make his fortune there. he rose, and he rose and he was extremely successful and he became deputy minister of the soviet isle industry. when everything fell apart. he thought this is my opportunity this is my chance. he created the first private oil company. that's what it is. that's the story. i'm sorry. i lost the track. yes, indeed. he was a different story. because -- [inaudible] he was an author and in that respect, he's the respected by his colleagues in the oil industry. one of his liabilities within
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the industry itself is that he was regarded as an -- [inaudible] he was a man who came in latterly from a background as one of the people who made phenomenal fortunes in the tail end of the gorbachev period. that is trading, buying and selling computers, building up from there, developing a bank. he ha a bank called -- [inaudible] and so on. he was a go-go financier. among the assets that he picked up at that time, was an -- oil field which was losing money and not particularly attractive property but then came the asian flu. rub the asian flu of 1998 and the crush of the russian economy at that time. and suddenly he was out of the banking -- and so he was in the
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oil business. and so he made a go of the oil -- what followed was remarkable. he was free of the hangup you have to respect the oil. present value oil today is worth nor today. how he went after it. and he brought in westerners to help him do that. and double oil production. the problem was that he was a rebel on every front and in particular he defied the president which was a very unwise thing to do. and so he ended up in a blood match with putin. whom he regarded with contempt. he consistently underestimated putin. i'll give you a little episode that became famous as the symbolic turning point which people knowledgeable people in
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moscow as soon as they heard of this episode -- realized that he was -- not doomed at least he was going -- [inaudible] in february of 2003, it's eight months before his arrest, putin summoned the rich billionairings of russia the private sector bill areas as he did from time to time. and there they are in the room like obedience school children. putin has the center table. and he shows up with a powerpoint presentation on corruption in russia. [laughter] and gets up and says, mr. president, the most serious problem in the russian economy today is corruption. and the epicenter of that
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corruption problem is the russian government, mr. president. in fact, it's the ministry of energy. that ministry of energy -- [inaudible] and it's also the russian national oil company. and he goes on to talk about all of the ways in which the guys are -- [inaudible] at which point putin interrupts. he's been sitting there calmly and he says, i understand that you have a great many reserves that you not developed. and i understand that you too are having problems with paying your taxes. and he goes on to list in a quite voice of these things amount to say he's maybe himself the center of corruption.
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[inaudible] there was nervous laughter in the room. everybody knew in moscow by the next day that he was in trouble. so that really is what it comes down to. he defied the man and so as long as the man is there, it's hard to -- [inaudible] we're hearing now vibrations to the effect that they let him out early. thane, thank you for your passionate and suck -- here in the country whatever we talk about new exploration we're
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talking about environmental implications and we hear about disasters here. we don't really hear much about them in russia and i'm sure they exist and can be massive. i was wondering for you could talk about that. here we come to the guilty part. because i was conscious as everyone else that we are in a sense too clever for our own good. by the way one of the unfortunate consequences is the bo man stay that we -- that we have -- that we have harvesting now. that we are headed in all likelihood for an era of quite probably cheaper hydrocarbon and -- [inaudible] that thing which is so easy to us which is to climb no to our car and drive around to the nearest -- [inaudible]
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is something that is going to get easier and easier. for the next generation. and this is very bad news. for the environment. there's no question about that. fortunately in russia they don't have an environment. at least they have frequently behaviored as though they didn't have an environment. and certainly the oil industry has never meant particular -- been particularly concerned about the environment. i remember in the 1990s talking to the minister of the environmental science. he happened to be briefly also the ministry of agreology. i met him in the huge office. there were maps that showed radio active tam contamination. he was interesting. and id asked him about the environment. he said we don't have one.
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we can't afford one. it was very much the story of the 1990s. the signature of the russian hydrocarbon industry is very brief. it's absolutely conventional up to this point. and their investment in renewable and unconventionals is at this point. [inaudible] with one big exception in the nuclear power. they consider that to be a virtuous renewable. as for solar, well, the agency in charge of solar-power development is coordinated to the nuclear power agency which is tells you something. and so on. this is a story that has not yet begun. it's something that the russians are going have to become more conscious of. if only for one very direct reason entire northern third of
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russia is perm frost and it's melting. it's bubbling methane all over the world. and the consequences of a massive melting of perm ma frost is particularly serious in russia the economic disruption. never mind the environmental consequences. so we're talking about big downsize to this guilty love . >> one last question. >> thank you very much. to what extent is was he part of the corruption problem in russia, and could you say something about the actual and potential impact with russia's on -- obsession to the world trade organization and getting what it caused to be -- used to be called most favorite nation
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trade status. those are two different questions. i don't claim to be an expert on the world trade organization. there is a man in the washington area named keith bush who is well known for -- [inaudible] russian affairs. for many years. who is the world's living expert on russia and the world trade organization he works for the u.s. business council. i refer you to him. but i think it's a fair reduction that the russians are going to defend their domestic industries. every step of the way. i think the doctrine of free trade and globalization are not the direct reins that come first to the russians. and so we shall see.
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if schien considered a successful member of the wto. i'm sure that russia would be. [inaudible] i think the i think the fascinating thing about him is that one should resist the temptation to consider him an angel, a martier, or -- [inaudible] he was a man who emerged in a revolutionary time. he was a student at the time the soviet union fell apart. just graduating. he was a chemical engineer. he was a political organizer. he had that energy that energy. there are pictures of him when he's in high school, and he's
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just growing the first tash and became famous for that in the first decade. but there he is super confidence. he knows he's going to run the world and when you ask him the high school student what he wants to be. he's going to be a soviet factory director. this is a guy on the way. women, those qualities those qualities are the qualities of american talent. but soviet style. so that plus the fact that he was too young to have experienced really the soviet system and grown the protective cover of dissimulation that made him an object of fear and hatred by people in the oil industry and then it made him an object
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of greed by people within the -- [inaudible] who looked at him and sized him up as the perfect victim. this was a man who provocative in his behavior that all you had to do is lure him forward and you can challenge him. his behavior would become more and more provocative until finally he robbed himself of support within the oil industry, within the establishment, by the time he was arrested, he had only friends he had left in the united states. it was, i think, a fascinating tail of direction, organized destruction and self-destruction. and it's absolutely fascinating case. >> well, thank you. that was -- [applause] tell us what you think about our programming this weekend.
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you can tweet us at booktv. comment on our facebook wall or send us an e-mail. booktv non-fiction books every weekend on c-span2. you're watching c-span2 with politics and public affairs weekdays featuring live coverage of the u.s. senate. on weeknights watch key public policy events and every weekend the latest non-fiction authors and books on booktv. you can see past -- program and get our schedule on our website. and you can join in the conversation on social media sites. >> we're here with author and journalist with the new book. what was so great about the great comprise? >> well, most people say anything about the comprise have vaguest reck lax from perhaps junior high school say there was a crisis in 1850.
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the nature was the country was in the brink of civil war. most of the political culture and most americans thought war was going to take place. that the deep south was going to succeed. they were closer to possession than most americans today realize. certainly the deep south states, texas was arming other southern states were sended armed men to texas. why am i talking about texas? had there been a collision war begun in 1850. it would have begun in santa fe, new mexico. why? because texas was its on imperial ambitiouses to move west ward supported by the slave holding south claim to invade the new mexico territory. there were many other parts to the crisis fundamentally, it was whether or not the west would be slaved or free. in 1850, the south was militarized, southern
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nationalism at the peak. jefferson davis on the floor of the senate if a southern confederacy was to be formed now. they were ready to accept the presidency of it. the north on the other hand was nowhere near wed -- ready to go to war. and the north was dominated by the conservative wing of the democratic party and largely with the south and in other words -- the north would not have fought the war or won the same war suck -- with probably succeeded and consequences of that for the not only for american history but to the rest of the world quickly went tragic. >> what was the floor of congress like in 1850? >> it was result in result
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chaotic. intense. a debate in congress was like the world series today. there was no sports culture in the mid 19th century. politics the made american sport. americans came from all over the country to attend debates especially when great titans like henry clay and daniel webster and john c calhoun and others were debating. imagine a much smaller senate chamber crowded with men who might have hated each other literally elbow to elbow at the small desk reeking of cigar smoke, smelling of gas from gas lample -- lamps, carpets with spit toons scattered here or there. men spitting and missing and an intense conjected at fear with
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political men going mono and men know in the arena of 19th century american. >> two of the men henry clay and steven douglas. what was their role? >> henry clay had been in requirement. he was called out of retirement in kentucky to take charge of a attempt to create some kind of a comprise. he was known as great compriser for husbanding the comprise of 1820, the missouri comprise and the 1833 comprise that lost the country back against from crisis over south carolina's nullification of federal law. henry clay was a grand remarkable man, and never 2000 -- no one to say no when he was inviolated to be the center of political attention. he returned to washington and
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lead the debate for seven months straight trying to persuade congressman from the right and left and north and south to agree to a grand enterprise a grand bargain that would solve the slavery question once and for all. he failed. he was pivot fall to the debate but he failed in comaking the -- making the comprise real. he put together one of the first bills in the american political history. the collapse. what happened? douglas known to journalist at the time as a steam engine. very short, ferocious, northern democrat, youngest man in the senate, 25 years old. the marco rubio of his day, perhaps. did what clay had not done. he did the numbers. in other words what steven a.